After throwing $84M at SROs, Vancouver's spending $128K per room on renovations

The Marble Arch Hotel is a ramshackle, seven-storey brick pile in downtown Vancouver. It’s 100 years old, ancient by local standards. But aside from its age, there’s nothing special about it. The “Arch” is a featureless, grimy hovel, notorious for hosting decades of criminal activity, prostitutes and long-term resident Gilbert Paul Jordan, a serial sex offender who poisoned to death women using copious amounts of alcohol.

It’s now a money pit, into which tens of millions of tax dollars are being flung. The Marble Arch is designated as a “single room occupancy” hotel, or SRO. That’s a local idiom for slum housing. All of its residents are on social assistance and have concurrent disorders, including HIV and AIDS, mental illness and addictions.

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As part of a strategy to protect Vancouver’s dilapidated SROs from being upgraded and rented at market rates, the B.C. government has in the past five years purchased the Marble Arch and 22 others, for $84.5-million. According to B.C. Housing, the provincial agency responsible for the purchases, an “equal amount” was required for their refurbishment.

One of the largest hotels purchased, the Marble Arch has turned out to be the most costly. It required “significant life/healthy safety upgrades and had structural issues that needed to be addressed immediately,” according to a B.C. Housing spokesman. A weak exterior wall threatened to collapse. Residents were moved to other SROs while the wall was rebuilt and dozens of rooms were overhauled. That bill totalled $5.8-million.

More work was required this summer, after a resident accidentally set fire to a couch, triggering a sprinkler system and causing a flood in almost 30 rooms. There are currently 103 residents of a possible 142.

This month, the Marble Arch is to undergo “more extensive renovations,” including “structural, plumbing and electrical infrastructure work,” according to the province. The latest round of repairs is part of a $116.4-million SRO renewal package, funded by the provincial and federal governments. A dozen more provincially owned, 100-year-old SROs in Vancouver’s drug-infested Downtown Eastside are to be “restored, preserving their heritage features and the historic character” of the neighbourhood. All of the buildings require seismic upgrades and other structural repairs.

A total of 900 hotel rooms — most of them around 350-square-feet — will be improved by 2017. That’s a staggering $128,888 per room.

Taxpayers will have spent approximately $32,000,000 just fixing the Marble Arch, once the latest batch of “major” repairs is finished. The tally doesn’t include $3.9-million that has already been spent on building operations and support services since 2007. Nor does it include future “maintenance costs” to be borne by the province.

Worse, the Marble Arch will still be an inefficient, unsightly dump after all the work is done, sometime in 2014. There’s not much to improve on its looks and character, but the latest restoration effort will still have to adhere to Vancouver’s rigid heritage conservation restrictions; these typically forbid upgrades such as new windows. Single-pane glass in old wooden frames will just have to do.

Heritage conservation isn’t cheap, either. Three years ago, another publicly funded, century-old SRO in the Downtown Eastside was restored for $14,365,000, or $608-per-square foot of living space. Brand new homes in affluent neighbourhoods can be built — let alone purchased — for less.

B.C. Housing says that in this round of spending, taxpayers will be better protected. The agency notes that any financial “risks” associated with the current renovation project have been transferred to a private consortium selected last month to make the repairs. The consortium, Habitat Housing Initiative, includes Brookfield Financial Corp., Forum Equity Partners Inc. and Ameresco Canada Inc., all based in Toronto. The consortium must cover any expenses outside the $116.4-million budget.

That’s what they really want, rather than the old buildings on top

The province also insists that renewing — not replacing — its crumbling SROs is the most cost-effective way to maintain “this important stock of affordable housing.”

That’s highly debatable. Earlier this year, a new, 96-unit “supportive housing” building funded by three levels of government opened just around the corner from the Marble Arch. Pacific Coast Apartments features common amenity spaces, multi-purpose rooms for meetings, common kitchens and a dining room, plus other accoutrements. It is “designed to LEED Gold standard,” which suggests it is a highly efficient building that won’t cost a fortune to maintain.

The project’s total capital cost, including land value, was $20.3-million. That’s a huge bargain, compared with the $32-million spent to date on the old Marble Arch.

Why does the provincial government insist on throwing good money after bad on decrepit buildings? Prod Laquian, a Vancouver-based urban slum and human settlement expert under contract to the United Nations, thinks the government’s primary motivation is to secure title to valuable downtown land. “That’s what they really want, rather than the old buildings on top,” he says. “They figure they can sell the properties later, for a higher price, or pull them down and rebuild later, when they have some more money.”

It’s a short-term, “Band-Aid” approach to fighting homelessness, says Mr. Laquian, a University of British Columbia professor emeritus. “Homelessness cannot be solved by housing,” he says. “Just putting a roof over someone’s head doesn’t address the real issues behind their problem. The issues are drug addiction, disease and mental illness. We need to make these people self-reliant,” he adds, rather than increasingly dependent.

And that requires a different strategy, one that people seem reluctant to embrace. Rather than concentrate social housing in one part of town — in Vancouver’s case, the Downtown Eastside — authorities should spread it around, creating smaller residences in various neighbourhoods, and staff them appropriately. “Integrate people in these communities,” says Mr. Laquian. Help them get on their feet. Don’t isolate them.

Expensive? Of course, says Mr. Laquian. But it needn’t cost any more than current efforts, and it should prove more effective. “All we’re doing now is running faster and faster, spending more [money] and staying in the same place. The Downtown Eastside is not a normal, viable community. It should be left to private developers. Everything should be knocked down and rebuilt from scratch. My attitude isn’t very popular. People hate me for it. But I think I’m right.”